Deceptive Trade Practices under the UDTPA and FTC Lawyer Manual

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Deceptive trade practices under Uniform Deceptive Trade Practices Act (UDTPA)

The purpose of and remedies under UDTPA

The purpose of the UDTPA is to prevent dishonest businesses from doing injury to those honest businesses competing in their markets. Injunctive relief is available to protect individual consumers, where they are likely to be damaged in the future by a deceptive trade practice of another.

Under this UDPTA, the only remedy is an injunction. No damages remedy is available under the UDTPA, but damages for violations of the UDTPA are available under the CFA. To prevail under the UDTPA, a plaintiff need not prove monetary damage, or intent to deceive, or even actual confusion or misunderstanding. The prevailing plaintiff may be awarded costs and attorneys fees, but only if the court finds that the defendant willfully engaged in a deceptive trade practice.

Deceptive trade practices defined

A person engages in a deceptive trade practice when in the course of business the person does any of the following:

• Passes off goods or services as those of another
• Causes likelihood of confusion or misunderstanding as to the source, sponsorship, approval or certification of goods or services
• Causes likelihood of confusion or misunderstanding as to the affiliation, connection or association with another
• Uses deceptive representations or designations of geographic origin in connection with goods or services
• Represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation or connection that he does not have
• Represents that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used or secondhand
• Represents that goods or services are a particular standard, quality or grade or that goods are a particular style or model if they are not
• Disparages the goods, services or business of another by the false or misleading representation of fact
• Advertises goods or services with intent not to sell them as advertised
• Advertises goods or services with intent not to supply reasonably expected public demand, unless the advertisement discloses a limitation of quantity
• Makes false or misleading statements of fact concerning the reasons for the existence of or amounts of price reductions
• Engages in any other conduct which similarly creates a likelihood of confusion or misunderstanding

Deceptive practices under the Federal Trade Commission (FTC) Act

No private right of action

The FTC has powers to prohibit unfair or deceptive acts or practices in or affecting commerce. It may forbid such practices by its order, as well as file civil actions. Many of its internal proceedings result in consent decrees. Individuals have no standing to sue under the Act but may enforce a consent decree if the FTC does not.

However, the CFA requires that the FTC Act and regulations, as well as federal court decisions relating to the FTC Act, must be considered by Illinois courts when construing whether a Consumer Fraud violation has taken place. 815 ILCS 505/2.

Pertinent FTC regulations at 16 CFR, explained below, include:

• FTC Credit Practices Rule, 16 C.F.R. 444.
• FTC Used Car Rule, 16 C.F.R. 455.
• FTC Holder in Due Course Rule, 16 C.F.R. 433.